Greek unemployment at new high as protests go on

ATHENS, Greece — Unemployment in Greece hit a new seven-year record and inflation was stuck above 5 percent, as protests continued against the harsh spending cuts and tax increases the government is using to drag the country out of its financial crisis.

The Greek Statistical Authority said Thursday that the jobless rate rose to 13.9 percent in November, the highest since monthly figures were first released in 2004 and up from 13.5 percent in October.

The agency also said inflation remained at an annual rate of 5.2 percent in January, the same as in December and more than twice the official target for the overall eurozone.

After years of budget overspending, Greece was saved from bankruptcy last year by a €110 billion ($150 billion) loan package from its European partners and the International Monetary Fund that will keep it solvent through mid-2013. In return, the governing Socialists took swift shock measures, cutting pensions and salaries while raising taxes and retirement ages.

Under the close eye of its creditors, the government has also pledged to restructure loss-making state transport companies, reform the profligate public health sector and eliminate tightly controlled licensing practices and fixed profit margins for dozens of professionals — from lawyers to ballet teachers.

Unions have reacted with strikes and demonstrations. Some 500 pensioners held a peaceful protest march through Athens on Thursday to demand pension increases. State hospital and health care fund doctors have been on strike for days — joined by pharmacists for much of the week — while Athens public transport workers are holding a series of walkouts on Friday.

Prime Minister George Papandreou said Thursday the reforms were working, complaining that "vested interests" were fighting his government.

"We still have a long road ahead," he said. "We have to transform a dysfunctional bureaucracy and often not transparent public service, and we are doing so very quickly. But there is a growing realization in the Greek public that although these changes might be painful at first ... these are deep reforms that are necessary and long overdue."

"I have no qualms about taking on vested interests that are stifling competition and keeping out younger people and entrepreneurs out of the job market," he said.

The country's largest labor unions have called a general strike for Feb. 23, and retailers say they will join the protest and close their stores for 24 hours.